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Mortgage Sense

Episode 76 - Mortgage Sense on Chai Time Money Sense TV on Chai Time. Tara Thind from Chai Time, Channel M (Omni TV) interviews Jessi on a number of topics affecting ...

Mortgage rates trend higher for Friday

30-year fixed mortgages

The average rate you’ll pay for a 30-year fixed mortgage is 4.30 percent, an increase of 1 basis point since the same time last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 4.35 percent.

At the current average rate, you’ll pay a combined $494.87 per month in principal and interest for every $100,000 you borrow. That’s an additional $0.59 per $100,000 compared to last week.

You can use Bankrate’s mortgage calculator to get a handle on what your monthly payments would be and see what the effects of making extra payments would be. It will also help you calculate how much interest you’ll pay over the life of the loan.

15-year fixed mortgages

The average 15-year fixed-mortgage rate is 3.75 percent, up 4 basis points over the last seven days.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $727 per $100,000 borrowed. That may put more pressure on your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much more rapidly.

Does it make sense to buy mortgage points by refinancing?

I know that points reduce the interest rate and they can be deducted during the life of the mortgage, but does it really make sense financially to buy mortgage points or do they cost more than the benefit they offer?

I dont see why paying 1 point to lower the interest rate 1/8% makes sense. People say its worth it when you stay long enough to meet the break even point; where the amount of interest saved equals the amount in points you spent.